Lenovo Interested to Buy NEC Smartphone Business – Report

NEC In Talks with Lenovo Over Mobile Phone Unit

by Anton Shilov
04/01/2013 | 12:00 AM

Lenovo Group, one of the world’s largest PC makers, is in talks with NEC Corp., which wants to sell its money-losing division to an investor. Lenovo and NEC already supply personal computers to Japan under NEC brand-name, hence, the deal will hardly be completely unexpected.

 

NEC has until now said its mobile business is an important part of its overall operations. But after two years of losses the company is shedding assets to bolster profitability, reports Reuters news-agency.

Lenovo is known for taking over rivals in order to expand market share, therefore, the news should not be considered as a complete surprise.

NEC does not sell a lot of mobile phones; back in October the company cut sales target of NEC Mobiling to 4.3 million units per quarter from 5 million units. Moreover, the mobile business unit is losing money, based on media reports.

The acquisition of NEC’s mobile phone business unit will help Lenovo to boost is smartphone market share in Asia. The latter might help the company to enter global smartphone market, something that Lenovo not only wants, but clearly needs in order to create an eco-system capable to compete against Apple’s.

"Amid the rapidly changing market we are considering a number of ways to bolster the competitiveness of our mobile phone business, but nothing has been decided," NEC said in a statement through the Tokyo Stock Exchange on Friday in response to the media reports, Reuters notes.

Separately, a report recently emerged that Lenovo is boosting its chips design team to 100 engineers, who are supposed to design unique chips for Lenovo’s smartphones and media tablets. With a chip development team boost and NEC’s mobile unit acquisition, Lenovo may become a major player on the market of smartphones in Japan, which could be a jumping-off place to expand in Asia and then worldwide.

Lenovo and NEC did not comment on the news-story.